The country's biggest consumer group is urging the corporate watchdog to investigate how online calculators are used in the sale of home insurance, after it uncovered wide variations in the cost estimates produced by these digital tools.

In new research, Choice tested how different insurance companies' online calculators estimated the cost of rebuilding the same house in the same suburb. It found the results vary by as much as 18.8 per cent, or $71,533.

The consumer advocacy group has written to the Australian Securities and Investments Commission (ASIC) asking it to look more closely at the tools, which are used when consumers are getting an online insurance quote. It is concerned the discrepancies in the calculators' results could mislead consumers into under-insuring.

Choice fears people could be misled by insurance companies' online calculators.Credit:

The concerns - which were strongly rejected by insurers - were raised after Choice tested calculators offered by Insurance Australia Group's CGU and NRMA brands, Suncorp's GIO, QBE and BudgetDirect.

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As the insurers rely on the same underlying data in their calculators, the different results occurred because each company asks users different questions about the house to be insured. Choice is pushing for greater transparency about why some insurers ask more or less questions, saying without it, insurers could "game" calculators to produce higher or lower estimates.

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Head of campaigns Sarah Agar said such calculators played an increasingly important role in the sales process, but the lack of consistency in these estimates risked misleading people.

“It’s absolutely imperative insurers are completely transparent with how they build their online calculators and their rationale for including or excluding particular qualifying questions," Ms Agar said.

“The current lack of standardisation across the industry, while not linked to an individual insurer’s actions, has the potential to mislead or deceive a customer."

Insurance Council of Australia spokesman Campbell Fuller denied consumers were being misled and said the calculators produced different estimates for the same house because they were customised according to the underwriting standards of each insurer.

Cost estimates can also vary because different insurers have their own arrangements, such as a panel of builders, for rebuilding or repairing properties, or they may not fully cover demolition costs.

"Insurers are not gaming the numbers, insures are concerned about under-insurance in the Australian community," Mr Fuller said, also highligting industry research that found more than 80 per cent of households were under-insured for home and contents cover.

An ASIC spokesman said the regulator was aware of Choice's concerns, and supported the use of calculators to help people make important financial decisions. "Obviously it is important that the calculators be as reliable as possible, and the industry should be aware of that," the spokesman said.

The company that provides the data for these insurance calculators, Cordell, said calculators could provide an objective guide, which could address the problem of underinsurance. It said the differences in the estimates produced were "explainable."

The Choice study sought cost estimates for a four-bedroom house from a range of insurance calculators, in four different postcodes. The widest gap in estimates occurred for a house in Sydney's Mosman, where an IAG calculator estimated a $380,942 rebuild cost, while a QBE calculator estimated a $452,475 rebuild cost.

It comes as the royal commission into financial misconduct will next week kick off a round of hearings into the insurance sector, which will start with life insurance before moving on to general insurance.